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Should Small Businesses Fold on Facebook in the Wake of Cambridge Analytica?

Posted on February 5, 2018

It’s been quite a month for Facebook. Between the media fallout from Cambridge Analytica’s data scandal, and a bizarre yet heated Senate hearing on internet privacy that landed CEO Mark Zuckerberg in the hot seat – Facebook has really been through the ringer recently.

But it’s not just Facebook that got thrown for a loop by the data scandal. Privacy concerns have led some individual users to #DeleteFacebook, and according to a recent Associated Press article, small businesses across the country are also rethinking whether advertising on the platform is giving their customers the wrong impression.

But unlike personal users who choose to delete their account, small businesses face a serious trade off when it comes to getting rid of Facebook. Many of them depend on the platform for efficient and cost-effective advertising, something not easily replaced by traditional media.

So, what is a small business to do in the wake of Cambridge Analytica – delete their account and risk losing their most efficient advertising medium – or forge ahead at the risk of a negative brand association?

According to Hannah Richards, a Content Marketing Strategist here at Ethos, the answer is pretty clear – forge ahead.

“Businesses that are worried about a negative brand association from advertising on Facebook are underestimating their audience,” says Richards. “The only people who see your ads on Facebook are people that are actively using the platform, so, if they’re still on Facebook they likely aren’t thinking negatively about your brand for being there as well.”

And if you’re worried that the size of your Facebook audience is declining due to individual privacy concerns, don’t be. The company added 48 million daily users globally in the first quarter of 2018, up 13% year over year in the wake of their biggest data scandal ever. So, while the #DeleteFacebook campaign may have blown up on social media – in the end most people chose NOT to delete their accounts.

The same goes for advertisers. According to Facebook’s COO Sheryl Sandberg, only “a handful of advertisers” told Facebook that they would be pausing their spending in the wake of the scandal, and at least one of those major advertisers has since returned. So there hasn’t been any meaningful trend away from the platform, which is not all that surprising considering the fact that the competition (i.e. other social media platforms, the Google display network, YouTube, etc.) have the same exact privacy issues.

“Facebook is the one taking the heat, but the problem is industry-wide,” says Richards. “The idea that small businesses would move their advertising off the platform, presumably to another source like Google display, Twitter or YouTube, it just doesn’t do much for them in terms of avoiding risk.”

In fact, most of the data that advertisers have available to them to target audiences on Facebook comes from third party sources to begin with – things like credit card data and internet searches (all of which are being phased out of Facebook’s targeting database as a precaution, according the Zuck). But despite the fact that Facebook is far from the actual source of the internet privacy problem – some small business remain concerned that the negative press will carry over to advertisers.

“If you’re really worried about it, ask your customer base,” says Richards. “Every industry and audience is different, and there may be some cases where it makes sense to let things cool off before having too big of a presence on the platform. But I believe that most social media users are astute enough to differentiate between the platform [Facebook] and the people who buy ads on it.”

Given the high cost of jumping ship, and the fact that larger companies have for the most part continued to utilize Facebook advertising, it seems prudent for most small businesses to stay the course.

About Ethos

Ethos is a multiplatform branding agency that develops and executes integrated marketing campaigns across multiple channels for companies inside and outside of Maine.

At Ethos, we believe that the most effective way to set a company’s marketing course is by finding its core truth – its ethos. We know that once we discover and communicate that core truth, we can truly make a difference for each client’s unique marketing and business objectives.

With Ethos, you get more than a marketing agency. You get a long-term partner whose goals are your goals.